How to Sell or Buy a Pub Business – on the Open Market, in 2018 with Guy Simmonds

Stephen Taylor. MD Guy Simmonds

How to sell your pub, sell your inn, sell your hotel, sell your restaurant or sell your licensed property with Guy Simmonds in 2018, and obtain the best possible price on the open market - not by auction. Free valuation. No sale – No Commission.

“One of the perceived advantages in selling a property at Auction, is that this route hopefully offers a quick sale for the vendor, literally ‘on the fall of the hammer’.

This is because at this point, binding contracts are usually deemed to be exchanged, with a non-refundable deposit paid. Another perceived advantage to the vendors is that they can agree a ‘reserve price’ (usually the undisclosed minimum price they will accept) whilst agreeing to market at an agreed published guide price (which can be lower or higher than the undisclosed reserve price) in order for the agent to try to stimulate interest in the property above this figure. The aim is then, to hopefully culminate in attracting two or more potential buyers, who in theory will try to outbid one another to secure the final and successful bid. However, we have noticed from our research and experience over the past year, that the specialist licensed property auction route is not attracting the highest prices for vendors.

Ultimately the market of course determines the sale price, whether by auction or private treaty sale. Guy Simmonds firmly believe that the best sales route for 2018 is by a high profile, extensive, and specialist marketing campaign - not by the auction route.

The problem we have encountered when holding licensed property auctions is that, buyers often relate such auctions as a ‘desperate sale’, and therefore often only bid up to a level, whereby they ensure they will secure a ‘bargain’. Also many potential buyers are now very suspicious of auction sales (unlike open market private treaty sales) and will not be persuaded to buy or bid under auction conditions, thereby potentially severely limiting the number of purchasers, which could then obviously and detrimentally effect the sale price, for our vendor clients.

Also, providing profitable/thriving freehold licensed businesses are correctly and realistically valued, we are finding that the market is extremely buoyant in 2018, and not only can a higher price usually be achieved on the open market, (when compared to auction), but also the sale process and timescale is invariably quicker.

When we discreetly visit publicans who wish to sell (or are already trying to sell with another agent without success), we give a free and current market valuation, taking all relevant factors into account. Eg. Location, apparent condition, turnover, profitability, potential for alternative use, trading history etc. We then discuss and agree our open market (or confidential) successful and proven, unique marketing strategy. This includes our own highly successful website and unique collection of associated websites and generic domain names. If desired, our full marketing package, also includes photo advertisements of the business, within our regular and dominant full pages adverts in the leading trade journal ‘The Morning Advertiser’.

For our freehold clients, we also advise upon the option of creating a new free-of-tie lease, and finding a suitable long term lessee for the freeholder. This is especially of interest to retiring publicans or buy-to-let investor clients, both of whom then retain the appreciating freehold for investment, and benefit from a ‘lump sum’ when we sell the new lease, and then the continuing sensible sustainable rental income. Again, this is not possible for the auction route and far better to open market using our experience and expertise, taking time to find the most suitable lessee.

We also find that our purchasing clients prefer this open market sale process, since they can negotiate through ourselves a price acceptable to the vendor, have sufficient time to plan their due diligence, and work to a timescale that suits our vendor clients. Also, the sale transaction invariably completes in a much more relaxed and discreet manner, thereby keeping any disruption to the business to a minimum, to the obvious benefit of both vendor and purchaser.

Where I believe the only route where pub auctions do still have a valuable role to play, is when the Corporate Companies have disposals of many licensed properties that they wish to offload. Often these ‘block’ auctions comprise of some failed businesses, are often closed, neglected and frequently need huge investment, in order to either become profitable again or realise an alternative use. In these particular instances perceived bargains obviously do exist for the experienced and savvy buyer.

Pictured are some of the pubs sold by Guy Simmonds on the open market.

Should you wish to sell your pub or sell your business anywhere in the country (or are currently trying to sell your business without success) then please call us on 01332 865112 or email stephen@guysimmonds.co.uk to arrange a discreet, no obligation and free valuation.”